Has the US plotted its own downfall with the rise of the debt ceiling? (09July2023)
Has the US signed its own downfall with the rise of the debt ceiling? Extract from the NY Times news article dated 7 June 2023: The government is expected to borrow around $1 trillion by the end of September, according to estimates by multiple banks. That steady state of borrowing is set to pull cash from banks and other lenders into Treasury securities, draining money from the financial system and amplifying the pressure on already stressed regional lenders. Source: https://www.nytimes.com/2023/06/07/business/economy/debt-ceiling-borrowing-binge.html According to the NY Times article, the US needs to raise $1T by the end of September 2023. Thus far, the Debt Ceiling is over $32T (compared to the $31.4T limit). The US can issue bonds to fund the debt but who is willing and able to buy them ? What could follow is the printing of USD, more inflation and followed by more interest rate hikes to bring down inflation. Bank Term Funding Program (BTFP) - are the US banks doin...